On the morning of Friday, September 26, in addition to the shocking news of Bill Gross’ departure from Pimco, the world was just as shocked, or not as the case was for many, that a former NY Fed staffer, Carmen Segarra, who had been previously fired for suggesting that Goldman Sachs has an undue influence on the NY Fed and gets a preferential treatment (certainly as a result of NY Fed’s president Bill Dudley being working previously at Goldman Sachs), had released nearly 50 hours of tapes confirming her allegations: that the NY Fed was nothing but a branch of the bank that controls every central bank. The full details were presented in “How Goldman Controls The New York Fed: 47.5 Hours Of “The Secret Goldman Sachs Tapes” Explain.”

Ironically it was on that very day that another recent Goldman hire from the NY Fed – a classic case of, as the NY Times puts it, the “revolving door, the symbolic portal that connects financial regulators to Wall Street” – a 29-year-old former New York Fed regulator named Rohit Bansal, got into hot water after something “shocking” was revealed: he had an inside source at the NY Fed who was providing him with illegal, confidential information on a regular basis.

Here is William Dudley, formerly of Goldman Sachs and president of the New York Fed, saying “I don’t think anyone should question our motives.” It may have been an order.

As Bloomberg notes, following the re-escalation of the Segarra scandal, Bansal was promptly fired. Of course, had Carmen not revealed to the world just how extensive Goldman’s domination of the NY Fed is, as Bansal’s action demonstrated, he would still be fed confidential information from the New York Fed itself.

The banker, who had joined the company in July from the New York Fed, was dismissed a week after the discovery in late September along with another employee who failed to escalate the issue, according to an internal memo obtained by Bloomberg News that didn’t identify the pair. Jake Siewert, a bank spokesman, confirmed the contents of the memo, which was prompted by a report in the New York Times yesterday.

“We have zero tolerance for improper handling of confidential information,” New York-based Goldman Sachs said in the memo. “We are reviewing our policies regarding any hiring from governmental institutions to ensure that they are appropriately effective and robust.”

Wrong: what Goldman has zero tolerance for is having its bankers getting caught, or its manipulative action exposed to the general public, as took place on September 26. Once that happens, one or two bankers are shown the door, while the law-breaking culture continues unabated.

According to the NY Times, which broke the story, this is what happened:

From his desk in Lower Manhattan, a banker at Goldman Sachs thumbed through confidential documents — courtesy of a source inside the United States government.

The banker came to Goldman through the so-called revolving door, the symbolic portal that connects financial regulators to Wall Street. He joined in July after spending seven years as a regulator at the Federal Reserve Bank of New York, the government’s front line in overseeing the financial industry. He received the confidential information, lawyers briefed on the matter suspect, from a former colleague who was still working at the New York Fed.

As a reminder, the NY Fed is also the world’s biggest hegde fund, as it is the place where, at Liberty 33, the Fed’s market moving operations are executed. It is also where the legendary PPT is located. Continuing:

The previously unreported leak, recounted in interviews with the lawyers briefed on the matter who spoke anonymously because the episode is not public, illustrates the blurred lines between Wall Street and the government — and the potential conflicts of interest that can result. When Goldman hired the former New York Fed regulator, who is 29, it assigned him to advise the same type of banks that he once policed. And the banker obtained confidential information, along with several publicly available facts, in the course of assignments from his bosses at Goldman, the lawyers said.

What exactly data was one current NY Fed staffer leaking to a former NY Fed staffer, currently working at Goldman?

The information provided Goldman a window into the New York Fed’s private insights, the lawyers said, including details about at least one of Goldman’s clients, a midsize bank regulated by the Fed. Although it is unclear how Goldman bankers used the information, if at all, the confidential details could have helped them advise the client.

Because if you are not a part of the club, Goldman will chew you up and spit you out, courtesy of confidential NY Fed information.

Naturally, “the emergence of the leak comes as questions mount about a perceived coziness between the New York Fed and Wall Street banks — Goldman in particular. Revelations from a former New York Fed employee, Carmen Segarra, recently stoked that debate. Ms. Segarra released taped conversations suggesting that her supervisors went soft on Goldman, specifically over a deal that one regulator called “legal, but shady.””

What questions? Goldman controls the NY Fed, period, the end. For the NYT the conclusion is a little more roundabout: “The leak strikes at the heart of questions about the ability of the New York Fed — the public’s eyes and ears on Wall Street — to maintain its independence from the banks it regulates. It also comes as a popular image of Goldman as a bank that puts profit above all has begun to fade.”

Which is precisely what Goldman wanted: keeping a low profile while changing absolutely nothing about its corrupt culture, a culture which is enabled by its very regulators who are captured courtesy of former Goldman employees being placed at strategic top posts. It really isn’t rocket science.

And the biggest irony is that Bansal’s illegal abuse of confidential NY Fed data only was noticed for the first time… when Carmen Segarra’s allegations hit the public for the second time on September 26 as noted above:

At the request of his bosses, Mr. Bansal gathered information about how regulators might view various issues facing Goldman’s banking clients, the lawyers briefed on the matter said. Much of what Mr. Bansal learned, the lawyers said, was fair game.

But in an email to his supervisor, Joseph Jiampietro, Mr. Bansal shared some potentially confidential supervisory information about a Goldman banking client. Mr. Jiampietro — a managing director at Goldman who was once a senior adviser to Sheila Bair, the former F.D.I.C. head — has since told colleagues he had no idea the information was subject to regulatory restrictions.

“Mr. Jiampietro never knowingly or improperly reviewed or misused” confidential supervisory information, his lawyer, Adam Ford, said in a statement. “He should not have been terminated. Any compliance failings regarding Mr. Bansal had nothing to do with Mr. Jiampietro.”

It was not until the morning of Sept. 26 that Goldman executives objected to some of Mr. Bansal’s information, the lawyers briefed on the matter said. During a conference call with Mr. Jiampietro and two higher-ranking Goldman executives, Mr. Bansal circulated an email with a spreadsheet attached. The email apparently set off alarms within Goldman. Within hours, the bank opened an internal investigation and alerted the New York Fed.

Goldman determined that the spreadsheet contained confidential bank supervisory information. Federal and state rules classify certain records, including those generated during bank exams, as confidential. Unless the Federal Reserve provides special approval, it can be a federal crime to share them outside the Fed.

Of course, had the Segarra story not resurfaced, Bansal would still be at Goldman.

As for the leaker at the NY Fed, we know this: “Some of Mr. Bansal’s information, the lawyers said, may have come from Jason Gross, who worked at the New York Fed at the time.”

This guy: a bank examiner, and formerly a controller at Deutsche Bank, a person interested in “pro-bono consulting.” We already know Bansal is one of Gross’ connections. Who are the other 10, and how soon until all his connections “unfriend” him?